February 15, 2023

Developing Categories via Discounts

Back to the brand we were studying. Look at the percentage of sales generated below the historical average price point by Category:

Look at Category 2. As a marketer, I'd have a discussion with the head of this Category. Why is this person discounting everything? And if the marketer is the one discounting this category, then the merchant needs to have an honest discussion with the marketer ... "why are you destroying the integrity of my category?"

There are so many instances in our modern world where a merchant needs to sit down with a marketer and have an honest discussion about the incessant discounting marketers crave. Teaching a customer to value a category only when there is a promotion is teaching a customer the wrong lesson.

P.S.:  I once worked with a Chief Merchandising Officer. This woman told me that it was her job to ask marketers questions, and when the answer to the question wasn't to her liking, it was her job to roll up a newspaper and swat the marketer across the forehead with the newspaper. Yeah, times were different in the 1990s.

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